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Lord Bach: My Lords, before we move to the Statement on passports, I take this opportunity to remind the House that the Companion indicates that discussion on a Statement should be confined to brief comments and questions for clarification. Peers who speak at length do so at the expense of other noble Lords.

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4.10 p.m.

Lord Bassam of Brighton: My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Home Secretary. The Statement is as follows:

    "With permission Madam Speaker, I wish to make a Statement to explain why passport fees are to increase by £7 to £28 for the standard passport and by £3.80 to £14.80 for the child's passport.

    "I am also publishing the Passport Agency's corporate and business plan for 1999-2002, together with a separate recovery plan. I am placing both documents in the Library of the House and the Vote Office.

    "As the House is aware, the agency encountered major problems last summer. I greatly regret the severe inconvenience caused to the public and would like to repeat my apology for what happened. However, the emergency measures which I authorised in the summer have proved effective. Turnaround times for passport applications have been within 10 working days since August. The current position is that all offices are processing work within a maximum of four working days. The current total backlog is 47,000 applications, which represents about four days' work.

    "A report from the National Audit office, published in October, found that £12.6 million had been incurred meeting the exceptional costs involved in remedying the position. I think that the whole House would accept that it would not be right for these costs to be met by a fee increase, and I have therefore agreed with the agency's new Chief Executive that they will be met instead by a programme of efficiency savings.

    "The NAO report also makes clear that some fundamental changes are necessary to improve the quality and reliability of the agency's service to the public. To effect these changes will require significant investment. That investment is the reason for the increase in the passport fee, given the fact that successive governments have rightly determined that the agency must be self-financing.

    "Madam Speaker, the Passport Service became an executive agency in 1991--a change which has undoubtedly delivered improvements.

    "While the agency has been successful in driving down unit costs, its record for customer service has in fact been less consistent and, as the NAO report makes clear, some of the causes of last summer's problems were deep rooted. While the agency has sought to reduce the maximum time taken to process applications from the four weeks norm in 1991, it has had problems in consistently delivering the more recent two-week target.

    "Since the early 1990s up until last summer, the time taken to process applications has in fact risen significantly above two weeks to a maximum of about four weeks in the busy season each year. As a

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    result, there have been queues at our passport offices each summer and increasing problems in responding to a rising volume of telephone queries.

    "Our strategy for the agency takes full account of the NAO report and seeks to deal with these problems.

    "First, new performance targets are to be set to ensure that the two-week turnaround means what it says throughout the year.

    "To ensure that the agency can in practice meet these targets I have agreed to increase its capacity by 25 per cent to enable it to issue an additional 1.3 million passports each year. This extra capacity will be met by the opening of a new regional office for the North East of England, and by a 30 per cent expansion of the existing Peterborough office.

    "The new North East office will create 500 additional jobs and will be based in Durham. The Peterborough expansion will mean the creation of an extra 100 jobs.

    "Other improvements to be made include the following. From March next year there will be earlier opening and later closing for all the agency's offices and Saturday opening as well. This will deliver a 45-minute maximum waiting target.

    "The renovation of public counter areas in all offices will take place. A new public counter service will be provided at the new office in Durham from next July. The London Passport Office will be relocated in spring 2001 from Bridge Place adjacent to Victoria Station to new premises where there will be a major improvement in facilities for the public. The forms and accompanying notes are to be redesigned to make them more customer friendly, and to reduce error rates. Payment options will be improved; and the quality of the telephone inquiry service is also being raised. A new call centre is being established in Bristol involving the creation of a further 60 jobs. The agency is being set a target to answer 90 per cent of calls within 20 seconds, seven days a week, throughout the year. No more than one call in 50 should receive an engaged tone even at the busiest time of year.

    "Demand forecasting, contingency and manpower planning are being strengthened to make sure that the agency can cope better with unexpected fluctuations of demand and other uncertainties in process.

    "Changes have also been made to improve the operation of the new computer system. But only when Ministers and the new Chief Executive are satisfied with the productivity of the new system as implemented at Newport and Liverpool will it be extended to the other offices, and then only on a phased basis.

    "Altogether this investment will cost an estimated £25 million per year.

    "The fee for a standard passport for an adult with 10-year validity will therefore be increased by £7 to £28; the fee for a child's passport for five years will

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    be increased by £3.80 to £14.80; and the fee for amending a passport will be increased by £6.00 to £17.00. The additional fee for customers seeking a personal service at the UKPA offices will be increased by £2.00 to £12.00. My right honourable friend the Foreign Secretary has decided that the higher fees which the FCO charge for passports issued by British posts abroad are also to increase.

    "All the changes will come into effect on Thursday, 16th December.

    "Madam Speaker, of course I understand that fee increases are never popular. However, the increase has been restricted to the minimum necessary to ensure that the crucial service improvements I have described today are delivered. I do not anticipate the need for any further increase in these fees for at least two years.

    "Even with the increase, the fee for a British passport is among the lowest in the world and will remain well below the level of other countries where, like the UK, there is no taxpayer subsidy. For example, the equivalent 10-year adult passport fee is £34.50 in the USA, £46.00 in Canada, £47.50 in Australia, and £74 in France.

    "This fee increase should ensure that the agency is put on a proper financial footing and is able to put in train the essential improvements to customer service. It will help ensure that this year's problems do not recur, that the modernisation programme is driven forward and that the agency is able to provide a significantly improved service to the public".

My Lords, that concludes the Statement.

4.20 p.m.

Lord Cope of Berkeley: My Lords, now that the Minister has seen the business plan--which he told us on 23rd November he had not seen although his colleagues approved it on 27th September--can he confirm that the plan published today anticipates an overall deficit of £17 million this year whereas the equivalent plan last year anticipated that this year would see an overall surplus of £19 million? So the total deterioration in performance is £36 million on a turnover of £100 million in this financial year.

The Minister says that efficiency savings will be found to cover the £12.6 million cost of the crisis. Can he confirm that, if there had been no crisis, these efficiency savings would have been available to ensure that the increases would be nowhere near the one-third increases which he and the right honourable gentleman the Foreign Secretary have announced today?

Thirdly, can the Minister confirm that the new computer system--which, along with the introduction of child passports, caused the problem--was chosen and signed for by the honourable gentleman, Mr O'Brien, the Under-Secretary of State in the department?

I read in the Sunday Telegraph that a document circulating within the agency and the Home Office called A Blueprint for the Future envisages a new

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strategy for a five-tier system of priorities under which there will be even higher increases for those wanting a passport quite quickly and, according to the newspaper, a worse service for the majority of travellers in the lower priorities. Will this document be published in the near future in order that we can consider, first, whether the report in the newspaper is correct, and, secondly, whether that is a desirable way to go?

Finally, as a matter of interest, what has happened to the £16,000-worth of umbrellas which were bought for the protection of the public--I suppose that is the right phrase--during the crisis? Will they be available for the next fortnight? I assume that until 16th December, when these increases take place, there will be another massive rush, for which I hope the Passport Agency has prepared.

4.22 p.m.

Lord Dholakia: My Lords, the noble Lord, Lord Cope of Berkeley, has asked a number of the questions that I would have posed--except for the one about the umbrellas. I am sure that we could all find better uses if we knew what precisely had happened to them.

Last summer, members of the public faced inconvenience because of the passport fiasco. Those of us who walk from Victoria to Westminster found a large queue of people. When we returned home, a number of people were still in the queue. All this was because of inefficiency on the part of the Home Office.

We are now told by the Home Secretary that the extra costs involved in dealing with summer emergencies will not be recovered by means of increasing the passport fees but by means of efficiency savings over the next few years, particularly when the new system is fully rolled out. No amount of pleading of this kind will convince the general public that they are not paying the price of the Government's failure. No matter how the Government have worded this announcement, it will add to the public's dissatisfaction by allowing an increase in charges, particularly when it amounts to 33 per cent. The question we need to pose to the Minister is where within the system was this failure produced?

Will the Minister tell us the reduction in staff dealing with passport matters since the Government came to power and before the summer fiasco? Was any warning received by the Government about the chaos that would result from a shortage of staff? Can the Government give an indication that such chaos will not arise on future occasions?

The noble Lord, Lord Cope of Berkeley, mentioned the National Audit Office report. It stated:

    "The passport delays of summer 1999 show that the Agency, Siemens Business Services and in turn the Home Office were responsible for what happened".

Perhaps I may ask if any disciplinary action has resulted. If so, what contribution is expected from Siemens to recover the extra costs incurred by the Government? Is it still to provide the computer services? Are there any penalty clauses in the contract to deal with computer failures?

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Overall, we are asking a family with two children to bear an additional cost of £21.60 for passports. That is a substantial increase. There is always a concern that the Passport Agency will be exploiting unacceptably its position as a monopoly supplier. Obviously the public have no choice but to use the agency's services; therefore they will be forced to pay the extra charges.

The message that comes out clearly as a result of this particular failure is that if you want additional resources, create more chaos. By the Government's own admission, service standards have fallen significantly during busy times. We need an assurance that this will never happen again. We need some guarantee that the additional resources and charges will help to solve the problem.

4.26 p.m.

Lord Bassam of Brighton: My Lords, I am not sure that I can answer all the points raised in the helpful contributions of the noble Lords, Lord Cope of Berkeley and Lord Dholakia.

It is fair to say that we believe that the improvements to the service we have announced today should ensure that we no longer face the kinds of problem experienced last summer. I think people generally will welcome that. They will welcome the promptness of the service. There will be widespread understanding and acceptance that the cost of improving the quality of the service has to be paid for. We have given an undertaking that members of the public will not have to foot the bill from what has been described as the summer crisis, the chaos that was there for a brief period of time.

Today we are announcing real and genuine quality of service improvements. People will be very pleased to hear that. These, of course, come with a cost. It is accepted that there will be no taxpayers' subsidy for the Passport Agency. It is for that reason that we have announced the increase in fees today. I understand that people never welcome increases in fees--who would? But these costs have to be paid for.

As to the point made by the noble Lord, Lord Cope, about carrying past deficits forward, the costs of past deficits are not included in the fee increases. We expect that the fee levels, with the contingency element, coupled with efficiency savings, will recover all past and current year deficits over the next few years. We will obviously continue to review the impact of these fees in the first few months of next year. We will seek parliamentary authority for the recovery of deficits if and when that is appropriate.

The noble Lord, Lord Dholakia, asked about disciplinary action. I am not aware that we have taken disciplinary action. If it were appropriate in individual circumstances, where there was clearly a disciplinary matter, we would have to take action. That would be right and proper. That would be the case for any service we cover.

I am grateful to the noble Lords for making their contributions. We are now back on the right track. I am happy to follow up in writing the points made by the noble Lords. I believe that we are now well on the

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way to delivering the kind of UK Passport Agency service that we should be offering so that the public may go forward and enjoy their holidays in the confidence of knowing that their passports will be processed in due course and on time.

4.30 p.m.

Lord Lipsey: My Lords, does my noble friend agree that what the public want from the Passport Agency is a prompt, efficient and courteous service? Unfortunately, the public have not always been able to get that of late. However, if the public receive such a service, the extra price they are being asked to pay--which amounts to only about a penny a week over the lifetime of a passport--is a price well worth paying.

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